The cryptocurrency platform Debiex has been mandated to remit approximately $2.5 million after neglecting to respond to a lawsuit from the US Commodity Futures Trading Commission, which alleged it operated as a romance scam operation.
On March 13, federal court Judge Douglas Rayes approved the CFTC’s previous request for summary judgment in the case, directing Debiex to return about $2.26 million it misappropriated from its clients, in addition to a civil fine nearly totaling $221,500.
Judge Rayes remarked that there was no indication that Debiex’s failure to engage with the CFTC stemmed from “justifiable oversight.”
The CFTC initiated legal action against Debiex in January 2024, asserting that its employees operated a so-called “pig butchering” fraud, where they developed romantic connections with clients via social media to gain trust and persuade them to invest in the platform.
According to the CFTC, the operation ensnared five victims who collectively deposited about $2.3 million into Debiex, which the alleged trading platform subsequently misappropriated.
An excerpt from Judge Rayes’ ruling summarizing the CFTC’s allegations against Debiex, Source: CourtListener
The CFTC additionally accused Zhāng Chéng Yáng of acting as a “money mule” for Debiex, whose cryptocurrency wallets were utilized to receive and pilfer victims’ funds.
On March 12, Judge Rayes approved a CFTC motion for default judgment against Zhāng, determining that it was sufficiently claimed he controlled a crypto wallet with OKX “that received digital assets with no legitimate right to them.”
He stated that OKX was “voluntarily holding” the cryptocurrencies in Zhāng’s account and ordered the transfer of its contents, which included $5.70 worth of Tether (USDT) and nearly 63 Ether (ETH) valued at approximately $119,500, to an unnamed victim.
The CFTC asserted in its January 2024 complaint that Debiex’s operation involved its unidentified overseers targeting prospective victims via social networks to divert them to websites it set up, promoting itself as a “Blockchain Network Decentralized perpetual contract trading platform” where users could perform futures trading and “Mining transactions.”
Related: Four individuals charged in the home invasion of streamer Amouranth
Employees of Debiex would impersonate females and establish a connection with victims through “ongoing and repeated messaging, sharing alleged images of themselves” while claiming to be “extremely successful traders in digital asset commodities,” according to the CFTC.
Once a client created an account and transmitted their cryptocurrency, the CFTC stated that Debiex would disseminate “false information” regarding customer balances, trading positions, and profits.
“All of this data was most likely fabricated,” the CFTC asserted. “The evidence indicates that the Customers’ digital assets were merely routed to numerous digital asset wallets to obscure their final destination.”
Magazine: SEC’s reversal on crypto leaves crucial questions unanswered